SME: Edelweiss's SSO Saves Resources & Brings Customer Portal Services Back Inhouse

Dr. Michael Reber, Business Process Manager at Edelweiss Air, combines a background in Physics and Computing with a passion for service. It has led him to a highly unusual and some would say fairly innovative services career, guiding a small Shared Services team that is doing great things for this premium airline. He speaks with SSON's Barbara Hodge. [Read also: Read also: Why Germany’s Mid-market "Motor" Is Banking on Shared Services] While there is a lot of discussion around minimum viable scale for Shared Services in the industry, Dr. Reber confirms that the relatively small team of just 10 FTEs has already driven down costs and increased value for this premium airline – part of the Lufthansa conglomerate and a sister organization to the larger Swiss Intl Air Lines (formerly known as Swissair), whose office is just a short distance away, at ZÃ½rich airport. Reber moved to Edelweiss from Swissair just over a year ago, to spearhead a transformation based on process standardization, IT infrastructure, and systems/applications. The resulting consolidations, he explains, have already led to synergies and significant savings in terms of resources needed. These resource savings did not translate into redundancies, he hastens to explain, but rather took the form of pulling previously outsourced work – which had supported various web portals, including the customer- as well as employee-facing sites – back in-house. More specifically, the efficiencies that Edelweiss’s Shared Services team were able to drive through the enterprise resulted in 20-30 percent resource savings, which was enough, in addition to two more FTEs, to absorb all of the work that was being brought in-house. One of the things Reber points out as having been immediately obvious to him when he joined, was that relying on outsourcing partners was not a sensible or effective policy for Edelweiss. While the business had moved in this direction because it didn’t have access to the IT resources or the knowhow it needed to provide the relevant support to the Intranet, extranet, and the client portal, the advantages of outsourcing were quickly outweighed by the limitations this placed on agility and turnaround time. In addition, much of the internal data around planning etc. was considered too sensitive to share with a third-party, and so could not be effectively used within that services delivery model. While the aim was to make the business uniform and simple, the customer portal in truth required more than just "a simple" homepage, as it was the first point of engagement with clients (most of who book their tickets online). Reber is confident of the value of the new Shared Services model, which has brought portal management back in-house and leverages data across the enterprise to better effect: "The consolidated solution that has emerged is greater in value than the sum of the individuals who had previously provided the service," he says. It’s About Value What drives a business in a market as competitive as that of the airline industry is the ability to leverage value. And with its members, employees and customers all constantly on the go, that means being able to react quickly to new tools and applications favored by users, for example embracing mobile applications. "With a large percentage of our employees constantly on the move, offering access to important information across a number of different channels is a prerequisite," says Reber. "Social media has become an important part of our solution and is heavily integrated into Shared Services." Providing this service internally also means that the knowledge and expertise gained from these activities can be leveraged in-house, and feed into new projects. While standardization is cost effective, Reber is very sensitive to the fact that Edelweiss’s different employee audiences require different tools. The challenge has therefore been to offer, through one standard platform [SharePoint], a variety of tools for employees to pick and choose, and tailor to their own requirements. It’s about having access to universal tools with which to do the work better. The aim is to provide flexible solutions that meet users’ needs on the basis of a standardized system. That balance appears to be working. For example, one of the indicators that are crucial to evaluating financial viability in the airline business – capacity use of a plane – requires accessing booking data and flight plans to assess load capacity and optimize usage for a given flight. While previously data had to be painstakingly mined from booking applications, planning documents, and the ERP system, the consolidation has made this a smooth process. Today, all these calculations are accessed and managed in a central system, through Shared Services. With minimum effort, Reber explains, it is now possible to offer more value without constantly having to write new tools. [eventpdf] Benefits Edelweiss has become very good at planning and booking. In fact, within the Lufthansa group it has achieved the best EBIT results, says Reber. With an already excellent product, the airline will soon achieve savings around 70 percent in costs, compared to pre-Shared Services. And that is not taking into account any additional value generated, apart from bringing outsourced services in-house. As the entire enterprise is now working off the same platform, SharePoint, it saves a lot of internal resources because the know-how transfer is simplified. There is also less work as processes have been automated. "Our internal resources have achieved savings of 20-30 percent, based on using SharePoint," says Reber. What’s Ahead? While there have been efforts in the past to leverage the capability of the entire Lufthansa group more efficiently, it's very difficult for European corporations to cede control. Things that work at a large global conglomerate don't necessarily work at a medium-sized brand like Edelweiss, Reber explains, where emotional connection with the market is a significant differentiator. Another issue is the fact that, while many countries base their product on price, a brand like Edelweiss puts more emphasis on service quality and therefor provides "a little extra" for the customers. Because of this, mid-sized companies will always prefer to control their service processes from within their own brand. This emotional attachment to the customer is one of the reasons that DACH companies have been slow to embrace alternative sourcing solutions presented through Shared Services. Another reason is the strong hierarchical barrier, which is difficult to break within medium-sized European companies. While Edelweiss has a very flat organizational structure with hardly any hierarchy, it's not uncommon for other SME companies to have up to eight levels of hierarchy. In this case, explains Reber, it's very difficult to break through the programs, structures, and processes that are embedded within this kind of structure. "The extreme decentralization that defines these companies does not easily lend itself to the centralization of support services," he says. "It's a typical European problem, which persists even in the face of potentially significant cost savings. But today, it’s time for new ideas and approaches." Read also: Why Germany’s Mid-market "Motor" Is Banking on Shared Services

SME: Edelweiss's SSO Saves Resources & Brings Customer Portal Services Back Inhouse

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SME: Edelweiss's SSO Saves Resources & Brings Customer Portal Services Back Inhouse

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